Kenya lists first Islamic bond on stock exchange

Kenyan President William Ruto, on Wednesday, announced the listing of the country’s first Islamic bond, the Linzi Sukuk at the Nairobi Securities Exchange (NSE)’s Unquoted Securities Platform (USP).

This makes the product the first Shariah-compliant product on the country’s platform.

The bond is a three-billion-shilling ($23 million) Islamic secured residential-based security. It is with a maturity period of 15 years, offering an internal rate of return of 11.13 per cent.

Speaking in Nairobi, the Kenyan capital, during the listing of Linzi Finco Trust Islamic secured residential lease security (Linzi Sukuk) on the NSE, Ruto assured investors of a conducive business environment.

He noted that Kenya was open and safe for business. The President pointed out that the country’s investment legal framework provides adequate investor protection.

“I want to assure investors that I will go out of my way to ensure that Kenya is stable and safe for investors to unlock their potential in a peaceful environment,” he said.

Ruto said bonds will promote financial inclusion and broaden market access.

“Bonds will also align with the global move towards more stable and robust economic growth.”

He noted that the government was pursuing ambitious reforms that would turn Kenya into a regional business hub.

“We will not allow anyone to impede the country’s progress,” he added.

Ruto said resilient financial markets and stable macroeconomic indicators have sustained investors’ confidence.

“To maintain this trend, the government is committed to entrenching a predictable business and economic environment through appropriate policy measures,” he said.

Shariah-compliant funds are investment funds governed under the requirements of Shariah law and the principles of the Islamic religion.

Read Related News:

Ruto orders probe into mysterious killings in Kenya

Kenya floods death toll rises to 169

Striking Kenyan doctors hold talk with government

40 die as Kenyan dam burst amid heavy rain

Authorities charge Kenyan cult leader with murder of 191 children

Sukuk, also known as Islamic bonds, are financial instruments that comply with Shariah principles.

Among the most prominent of these is a prohibition of interest payments, a defining aspect of Islamic finance.

During the listing, Ruto warned individuals involved in corruption. He said the government would amend the law to allow the conclusion of corruption cases within six months.

“We will deal with accountability issues with the seriousness they deserve,” he said.

The President noted that the government will deal ruthlessly with those who misuse public funds, pointing out that these resources should always be used for the intended purpose.

He said the ongoing legal, policy and economic reforms were fundamental. It aimed at boosting the economy and developing competitive capital markets,” Ruto added.

He pointed out that a robust, efficient and transparent capital market was vital for providing liquidity and raising necessary capital. This, in turn, supports the overall economic plan.

The Kenyan leader said the government set up the policy to enhance corporate governance and accountability.

It thus aligns the standards of state corporations closely with those of listed companies.

“This will restore investor confidence and ensure these entities can leverage private capital more effectively.”

The President urged Kenyans to invest in the stock exchange, especially in bonds, shares and forex trading. (Xinhua)